IOC books Iranian oil imports for October; uncertain about future

PTI |Published: 12th September 2018 04:25 PM

Image used for representational purpose (File | Reuters)

NEW DELHI: Amid uncertainty over impending US sanctions against Tehran, Indian Oil Corp (IOC) has booked for import of usual monthly quantity of 0.75-0.8 million tonnes of crude oil from Iran in October but is unsure if the trade would continue thereafter, a senior official said.

While India wants to continue importing Iranian oil, albeit a reduced volume, US Secretary of State Mike Pompeo last week stated that Washington would consider waivers on the embargo but made clear that these would be time-limited, if granted.

State refiners, however, have no advice from the government on Iranian imports yet, the official said.

IOC, he said, had planned to import of 9 million tonnes of Iranian oil in the 2018-19 fiscal (April 2018 to March 2019).

"This comes to a monthly volume of 0. 75 million tonnes and we have been doing similar kind of import till now, including in September.We have booked a similar volume of 0.75-0.8 million tonnes in October".

US sanctions against Iran kick in from November, which will block payment routes.

"We don't know yet what stance government of India will take. We have not been told to stop or cut down on imports from Iran as yet. We are importing oil on a monthly basis," the official said.

"We don't know what will happen in November. Perhaps there will be clarity before that".

Indian refiners buying from Iran benefit from 60 days credit, terms not available from suppliers of substitute crudes - Saudi Arabia, Kuwait, Iraq, Nigeria, and the US.

But, banks are unwilling to handle payments once sanctions are implemented in the first week of November.

Also, the absence of payment mechanism may pose a challenge to the transportation of the oil as Iranian crude is bought on a CIF basis and shipped on Iranian tankers.

Under Cost, Insurance and Freight (CIF) mode of shipping, the seller assumes the responsibility of transportation and insurance.

The liability and costs associated with successful transit are paid by the seller until the goods are received by the buyer.